Facts of the Case

The petitioner, Hudson Insurance Brokers Private Limited, an insurance brokerage and advisory company registered under GST, was issued a scrutiny notice dated 11.08.2025 under Section 61 of the CGST Act read with the UTGST Act for the year 2021-22. The petitioner replied in Form GST-ASMT-11 on 25.08.2025 with supporting documents, but was thereafter issued a show cause notice dated 26.09.2025 under Section 73(1) alleging that the reply lacked relevant/supporting documents. After seeking extensions and missing a reminder notice, the petitioner ultimately filed a detailed reply in Form GST-DRC-06 with supporting documents on 26.11.2025. Despite this, the respondent passed the impugned order dated 24.12.2025 confirming a demand of Rs.13,42,051/-, acknowledging the DRC-06 reply in its own Paragraph 5 but rejecting it as inadequate.

Issues Involved

  1. Whether the demand order, which acknowledged the assessee's detailed reply but rejected it without assigning reasons, was a non-speaking order violating natural justice.
  2. Whether the writ petition was maintainable despite the availability of an alternative statutory appellate remedy.

Petitioner's Arguments

  • The petitioner argued that the impugned order neither dealt with nor assigned any reason for rejecting its detailed submissions and documentary evidence filed in response to the ASMT-11 notice and the subsequent show cause notice, making it a non-speaking order violative of natural justice.

Respondent's Arguments

  • The Department argued the writ petition was not maintainable given the availability of a statutory appellate remedy, and that the impugned order had been passed after duly considering the reply and finding it inadequate due to the assessee's failure to submit required documents.

Court Order / Findings

  • The Court reiterated the settled exceptions to the alternative-remedy rule — enforcement of fundamental rights, violation of natural justice, orders wholly without jurisdiction, or a vires challenge — citing Whirlpool Corporation, Radha Krishan Industries v. State of H.P., Godrej Sara Lee Ltd. v. Excise and Taxation Officer and Prodair Air Products India Pvt. Ltd. v. State of Kerala.
  • On examining the impugned order, the Court found that although Paragraph 5 acknowledged the petitioner's reply dated 26.11.2025, the order rejected it merely by asserting — without any supporting reasoning — that the reply did not adequately address the issue and that no documentary evidence was furnished.
  • The Court held that an order passed without reasoning cannot be justified and amounts to a non-speaking order violative of principles of natural justice; authorities exercising quasi-judicial power must consider the assessee's reply and give reasons for not accepting its contentions.
  • The impugned order dated 24.12.2025 was set aside, with the respondent directed to fix a date for personal hearing and decide the show cause notice afresh with due reasoning for acceptance or rejection of the petitioner's contentions.
  • The writ petition was allowed in these terms.

Important Clarification

  • A GST demand order that merely records that the assessee's reply/documents were inadequate, without engaging with what was actually submitted or explaining why it was rejected, is a non-speaking order and violates natural justice — regardless of an alternative statutory appeal being available.
  • Availability of an appellate remedy does not bar writ jurisdiction where natural justice has been breached; that is one of the well-settled exceptions to the alternative-remedy rule.

Sections Involved

  • Section 61, Central Goods and Services Tax Act, 2017 – scrutiny of returns, the stage at which the discrepancy notice originated.
  • Section 73, Central Goods and Services Tax Act, 2017 – determination of tax not paid without allegation of fraud, under which the impugned demand order was passed.

Decision – In Favour of

The decision is in favour of the Assessee — the non-speaking demand order was set aside and a fresh, reasoned decision after personal hearing was directed.

Case Details

Court: High Court of Punjab and Haryana at Chandigarh
Case No.: CWP-8559-2026
Coram: Justice Deepak Sibal and Justice Parmod Goyal
Date of Order: 17.04.2026

Link to Download the Order

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